CREDIT OPEN: Week set to surpass expectations
EU stocks are set for a modestly constructive start to Thursday’s session, partly representing a catchup manoeuvre with Wall Street where a late session rebound saw the S&P500 and Nasdaq both recover from earlier losses.
US index futures have since turned lower though after Nvidia Corp’s widely anticipated earnings, released after the bell on Wednesday, failed to inject renewed energy into markets with its shares falling after hours. That was despite the fact that the AI darling surpassed expectations with the price action likely a product of excessively bullish positioning. Elsewhere to note, Bitcoin advanced 3.6% to a record high today at USD97,892 as markets continue to position for a crypto-friendly incoming US administration.
Looking at the day ahead, this morning’s remaining data releases are unlikely to interfere with any go/no-go plans. Already out, UK public sector finance data showed an unexpected rise in borrowing in Oct where the PSNB ex-Banking Groups measure rose to 17.4bn from the 16.1bn revised level in Sep and the consensus figure of 13.3bn.
Later comes the usual round of weekly continuing and initial jobless claims data where both are expected to inch marginally higher while The Philly Fed survey for Oct should show the gauge for business outlook moderating, but still remaining above zero for a third straight month. Oct's existing home sales data is also out.
It’s a very busy day for both ECB and Fed speakers (see below). After hours yesterday, the Fed's Cook reiterated that the size & timing of rate cuts will be data dependent while Bowman would prefer 'to proceed cautiously' on rates. Fed Collins thinks additional policy easing is needed but by how much is unclear.
It’s also a big day for auction supply where Spain and France offer up a combined total of up to EUR17.25bn in mostly conventional paper while the US brings 10yr TIPS.
Otherwise, markets will be keeping an eye on geopolitics given the impact of heightened Ukraine/Russia tensions which pressured EU risk assets on Wednesday and put a fleeting bid into safe havens.
For more on latest developments see the European Breakfast Briefing
Thursday’s supply prospects
With a number of issuers still sat in the pipeline (details below) we are set to surpass the average supply estimate of EUR24bn given in our weekly issuance poll. That follows a busy session Wednesday where another mix of corp, FIG and SSA names made euro funding plays to take advantage of the remaining 2024 issuance window. In total we saw nine issuers print ten tranches worth a combined EUR6.6bn which put the weekly single currency haul (ex-HY) at EUR22.25bn.
** Thuringia EUR250m no grow Sep 2029 LSA tap
** L-Bank USD Feb 2028s at SOFR m/s +40 area IPTs
** Worldline EUR 5yr
** Prysmian SpA dual-tranche EUR 4yr and 7yr
** CEC Bank EUR300m 5NC4 SNP
** BayernLB inaugural GBP 5yr SNP
Stateside, the week currently sits at USD33.15bn (ex-SSA), already above the USD30bn average estimate. That comes after a red-letter day in the high-grade primary market on Wednesday which saw 9 issuers raise USD13.4bn. It also brought ex-SSA issuance for the month of November to USD81.4bn, also enough to top the monthly average estimate of USD70bn. For more colour see IGM's THE ENDGAME.
What to watch today
** Key Data: UK Oct PSNB ex-Banking Groups (07:00), FR Nov Business/Manufacturing Confidence (07:45), UK Nov CBI Trends Total Orders/Selling Prices (11:00), US Nov Philly Fed Business Outlook (13:30), US Weekly Initial/Continuing Jobless Claims (13:30), EC Nov P Consumer Confidence (15:00), US Oct Leading Index (15:00) and US Oct Existing Home Sales (15:00)
** Key Events: ECB’s Villeroy (05:25), Knot (08:00), Holzmann (08:30 & 16:00), Cipollone (08:30), Escriva (09:00), Patsalides (11:25), Elderson (11:25 & 15:30), Lane (15:30), Kazimir (16:00) & Vujcic (16:00) all speak, along with BoE’s Mann (14:00) and Fed’s Hammack (13:45 & 17:30), Goolsbee (17:25) & Barr (21:40)
** Auctions: SP to sell EUR4-5bn 2031, 2037 & 2042 Bonds (09:30), FR to sell EUR9-10bn 2027, 2028, Feb 2030 & Nov 2030 OATs (09:50), as well as EUR1.5-2.25bn 2032, 2034, 2036 & 2040 Linkers (10:50) and US to sell USD17bn 10yr TIPS (18:00)
** Earnings: 7 Stoxx600 & 5 S&P500 companies report
All times GMT
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